City officials say the head of the Frogtown Action Alliance is dodging them. Two former employees say he sexually harassed them. Leaders in the struggling St. Paul neighborhood fear Shem Shakir's bad karma is contagious.

The streets of Frogtown are tarred with contradictions. Along University Avenue, between Lexington Avenue and I-35E, humble handpainted business signs advertise the flourishing dreams that often accompany an economic boom. At Grotto Street the Trung Nam French Bakery has sprouted from the empty shell of a former Popeye's fast-food franchise. Across the way a grocery store touts its meat department in Spanish: "Carnicería! Fresco Siempre!" Farther along the avenue the Xieng Khouang Oriental Market and Cheng Heng Cambodian restaurant mix with less exotic neighborhood institutions such as Lendway's Lounge, a blue-collar watering hole.

Dale Street, Frogtown's main thoroughfare, intersects with University Avenue just west of downtown St. Paul. Four blocks north on Dale, at Thomas Avenue, stands the Speedy Market, a corner convenience store like any other. On nearby street corners swarm the detritus of the drug trade: scrawny kids riding bicycles and pledging allegiance to the Gangsta Crips or the Shotgun Disciples; slow-cruising cars circling the perimeter blocks, stopping now and then to broker a street deal; beat cops frisking teens they know on a first-name basis.

At the intersection of Dale and Van Buren, not even a quarter-mile from the Speedy Market, there is a former candle factory. Ten years ago arson would have been the likely fate of this 87-year-old concrete structure. But now the rehabbed factory, complete with stucco siding and a brand-new roof, is the headquarters of the Frogtown Action Alliance, a nonprofit created in 1992 that helped jump-start a kind of tenuous renaissance in St. Paul's most racially diverse and potentially vibrant neighborhood.

Craig Lassig

Nearly 15,000 people live in Frogtown, which is bounded roughly by University Avenue to the south, the Burlington Northern railroad tracks to the north, Western Avenue to the east, and Victoria Avenue to the west. More than a quarter of these residents are Asian. Another 18 percent identified themselves as black in the 1990 census; the bulk of the remaining respondents were white. According to those census figures, the median household income is just $16,645; more than a third of Frogtown's populace is living below the poverty level. A study of 1998-99 data by the Urban Coalition, a nonprofit public policy and research organization, found that 84 percent of the students who live within the area served by the Thomas-Dale District Seven Planning Council, which includes Frogtown, were eligible for free or reduced-price school lunches--compared with 62 percent citywide. Nineteen percent of the households in District Seven receive welfare, the highest number in the city, which has a seven percent average.

Shem Shakir, the founding president and chief executive officer of the Frogtown Action Alliance, spent the better part of the 1990s trying to help his neighbors share in the country's economic renaissance. And in many respects, he has succeeded. "I think that they've done a lot to make the changes in Frogtown that we've seen to date," says David Liset, interim executive director of University United, a local nonprofit development organization. "They've been some of the people to hold [other organizations] accountable and to make sure they do their part in order for us to move ahead."

In conjunction with area banks, the Alliance created the Frogtown Large Loan Fund in 1999. From a pool of $1.5 million, the fund makes loans of up to $100,000 to local businesses that otherwise would not have access to credit or be able to afford the exorbitant interest rates. Their Dale Street Façade Grant Program has been used to refurbish area businesses such as Junior's Bar and Grill and the Dale Street Greenhouse. In partnership with the Neighborhood Development Center, the Alliance transformed two vacant buildings at the intersection of University and Dale into small-business incubators, providing office space for 18 minority-owned companies. And thanks in large part to the savvy and tenacity of the 58-year-old Shakir, grants have poured into Frogtown from virtually every major private funder in the Twin Cities, including the Star Tribune Foundation and the Bush Foundation, not to mention the City of St. Paul itself, which has given the Alliance multiple grants and loans over the years. By 1998, when the group filed its most recent tax return, the Frogtown Action Alliance had annual revenues of almost $800,000.

For much of this year, though, the Frogtown Action Alliance has been under siege, more preoccupied with its own survival than that of its clients. In July St. Paul officials began an audit of funds awarded to the Alliance and to the Frogtown Puzzle Company, a now-defunct, for-profit spin-off created a year ago to bring jobs to the neighborhood. At issue are government-subsidized loans of $143,000 and $100,000, and a state grant of $275,000. But so far, despite repeated requests and two in-person visits by the auditor, Shakir has not granted access to the organization's financial records. Last month, in frustration, the St. Paul City Attorney's Office issued notices of default on the loans and the grant. The Alliance has 30 days to respond.

"I have not sat down with the city attorney and said, 'Okay, what is our next step?'" says Tom Harren, a manager in St. Paul's Department of Planning and Economic Development. "We're assuming that [Shakir]'s going to comply with us. If he doesn't, we'll have to decide what our remedies are."

St. Paul City Council member Jerry Blakey, whose district includes Frogtown, has more extreme measures in mind: "At some point we'll probably have to go in with the sheriff's department. We don't want to, but it may come to that."

The Frogtown Action Alliance's reluctance to open its books may be due in part to a number of lawsuits filed against it and a growing stack of unpaid bills. The Internal Revenue Service has filed a series of liens against the Alliance because the group has failed to pay its payroll taxes. Two former employees have sued the Alliance and Shakir for sexual harassment. And one of the Alliance's chief benefactors, the McKnight Foundation, is withholding the final $110,000 payment of a three-year, $315,000 grant. Nancy Latimer, McKnight's senior program officer, says the foundation has a policy of not discussing its grantees, but allows that the Frogtown Action Alliance will not see any more money until the foundation has "sufficient information."

To address the Alliance's problems, and out of concern about losing a vital resource in the fight to revitalize Frogtown, Blakey is hoping to cobble together a community meeting later this month. "We've got to look at the obvious question of what's going on with the Frogtown Action Alliance first and foremost, and, given the status of it, where do we go from there," says the council member. "Because we need an organization like that in this neighborhood."

The product that was to become the linchpin of the Frogtown Puzzle Company has little in common with your average jigsaw puzzle. It consists of a set of intricately carved, interlocking, three-dimensional wooden pieces inscribed with a logo or slogan. The idea was to sell the items as marketing tools. If Target wanted to celebrate the opening of a new store, for instance, the company might want to hand out puzzles emblazoned with the address and its omnipresent bull's-eye symbol.

The concept was hatched in Curt Hansen's garage. It was there, in the early 1980s, that the entrepreneur first began carving the puzzles and hit upon the idea of selling them to a niche market. Because he didn't have the capital to launch a small manufacturing plant, Hansen says, he decided to pitch his invention to a nonprofit group that specialized in placing poor people in jobs. "I come from the slums," he explains. "I know how hard it is to get out of those places. I thought this was one of these things that would benefit me, but it would benefit other people more. My philosophy was, I don't care if they can spell résumé; if they can work with their hands, I've got something they can do."

In 1984 Hansen took the idea to Shem Shakir, whom he knew through a mutual friend. Shakir, who at the time was working at a nonprofit social-service organization in Ramsey County, enthusiastically embraced the project. Hansen also enlisted the help of a friend, Phil Swan, to bolster the marketing end of the operation.

As Shakir rose through the nonprofit ranks, eventually landing at Frogtown Action Alliance, the fledgling puzzle company went with him. Business plans were developed, investors were sought, and the project enjoyed a groundswell of support. After Mikhail Gorbachev visited Gov. Rudy Perpich in 1990, he returned to Russia with a butternut-wood prototype emblazoned with the words Working Together We Can Solve the Economic Puzzle Between Our Countries in English and Russian.

Then, as Hansen and Swan tell the story, the project began to slip out of their hands. Without their input, a new top executive, David Carruthers, was hired. In November 1998, Hansen and Swan were summoned to a meeting with Shakir. They were asked to sign a contract that would give them part-time positions as consultants, paying $17 an hour, but no percentage of their company's earnings. As they went over the contract in the ensuing days, the pair came to the conclusion that they were being taken advantage of. "My last comment to Shakir was, 'Yeah, you're taking my idea and giving me nothing for it,'" Hansen recounts. "I haven't talked to him since."

Hansen and Swan consulted an attorney about suing Shakir and the Frogtown Action Alliance. They estimate that they have invested somewhere between $15,000 and $30,000 in the project, as well as countless hours of their time. But they figure a lawsuit wouldn't be worth the trouble. "The first thing he said was, 'Well, do they have any money?'" Hansen recalls of his conversation with the lawyer. "And so far our answer has been 'no.' Paying a lawyer to get nothing seems like a self-defeating proposition."

Three months after Swan and Hansen left, the Star Tribune published an article that hailed the puzzle company as a potential economic panacea for Frogtown. The story, printed in the paper's Metro section and written by Mary Lynn Smith, noted that the business expected to employ a dozen people when it began operations and twice that many by the end of 1999. The workers would earn $8.50 to $10.00 an hour, plus benefits--a significant step up from the average McJob. Revenues for Frogtown Puzzle Company were projected to exceed $800,000 in its initial year. "This is going to be a signature piece for Frogtown," council member Blakey was quoted as saying. "It's a business, it's in the neighborhood, and that's beautiful....This is actually welfare to work."

With the help of $60,000 from the William C. Norris Institute, a company that invests in inner-city businesses, and the $143,000 loan from St. Paul that's now the subject of an audit, equipment was purchased and renovations undertaken at 867 Pierce Butler Rte., a warehouse Frogtown Action Alliance owns. According to Carruthers, ten potential employees received training in woodworking, and five of them were eventually hired. A marketing director, graphic artist, and part-time office manager were also brought on board. In August of last year, the Frogtown Puzzle Company produced its first puzzles.

But by January the plan had begun to unravel. The company didn't have the money to pay Reiling Construction Company, which had renovated its headquarters. In addition, the puzzle company had never acquired a certificate of occupancy from the city. St. Paul inspectors demanded additional work before the building could be declared safe.

"The bottom line is this," says Carruthers. "The contractor wasn't paid, and the city, in January, came in and said, 'You only have a couple weeks to get it done.' It didn't get done and they shut it down. Everybody went home."

Carruthers initially believed that the Frogtown Action Alliance would be able to scrounge up the resources to get the company operational again, but that never happened. In April he quit. The warehouse building is now empty, its parking lot strewn with discarded tires, mattresses, and other refuse. Reiling Construction Company has placed mechanic's liens on the building and is suing Frogtown Action Alliance to recover $261,000 in unpaid bills.

"I left there with a real bad taste in my mouth," says Carruthers. "It's a time in my life I just wish hadn't happened." He is contemplating suing Frogtown Puzzle Company for what he says is $11,000 in unpaid wages, Carruthers adds. "If they were an operating entity, I'd go after it, certainly. But at this time they're not operating, so there's no money."

According to a press release issued by Frogtown Action Alliance on August 7, the puzzle company is not dead yet. The nonprofit group says it hopes to sell or lease the warehouse, then use the money to pay its debt to Reiling. The release also asserts that a new business plan has been formulated and that the company is hoping to secure a loan from U.S. Bank. Attorney Thomas Ward, who is representing the Alliance in the Reiling lawsuit, says the organization is working with the construction company to resolve the dispute.

Still, Jerry Blakey, who hailed the project just a year and a half ago, now looks on it as a squandered opportunity for the neighborhood. "They haven't done what they said they were going to do," the council member says ruefully of the Frogtown Action Alliance. "I was quite discouraged by that news."

A North Carolina native, Shem Shakir is a physically imposing man who carries himself with an air of imperviousness not often associated with the altruistic environs of the nonprofit world. He stands more than six feet tall, weighs more than 200 pounds, and practices tae kwon do. He drives both a Ford Expedition sport utility vehicle and a Mercedes Benz, and is partial to immaculately tailored suits. "When Shem comes to a function that requires casual dress, he wears jeans that have been ironed with a crease in them," says one person who has worked with Shakir in the Dale Street building.

According to an undated résumé on file at St. Paul City Hall, Shakir has a bachelor's degree from North Carolina Agricultural and Technical State University and did graduate work in business administration at Metro State University in St. Paul. Since 1978 Shakir has held a succession of jobs at area nonprofit organizations, working his way up from chief field representative for the St. Paul Urban League to his present post. He has been married to his second wife for more than 25 years and is the father of six grown children.

These personal tidbits have been culled from government and court records, and from people who know Shakir, because he isn't talking. Despite seven telephone calls, a faxed request for an interview, and an in-person visit to his offices, Shakir would not answer City Pages' questions about his biography or his embattled organization. Instead he faxed City Pages a two-page press release laying out steps that the Frogtown Action Alliance is taking to rectify its economic situation and stating that "significant progress" has already been made.

One explanation for Shakir's aversion to the media may be a lawsuit brought by Hussanatu Webber, a former office manager at the Frogtown Action Alliance.

In fall 1994, Webber claims in documents filed with Ramsey County District Court, she turned to Shakir in the midst of a personal crisis. At the time the 37-year-old mother of one had been working at the Alliance for about six months. Her duties, which earned her a salary of $26,000 a year, included taking the minutes at board meetings, keeping track of Shakir's schedule, and answering the phone.

Webber was having marital problems with her husband James. Because Shakir was an old friend of her husband (a relationship that had helped land her the job), Webber thought her boss might be able to help. Sitting at a conference table in the Alliance's offices one afternoon with Shakir, Webber unburdened herself.

But instead of offering a sympathetic ear, Webber says, her boss literally attempted to yank the wedding ring off of her finger, then told her he loved her. "What are you doing with James?" he allegedly asked.

In retrospect, Webber believes Shakir mistook her openness for weakness: "I don't know if he saw that as me being vulnerable. But at that point the unwanted advances started."

On this late afternoon in August, Webber is seated at a glass-covered table in the library of her attorney, Alf Sivertson. As she speaks of her tumultuous employment at Frogtown Action Alliance, she carefully enunciates each syllable, her accent still tinged with a hint of her native Sierra Leone, and the West African nation's past as a British colony.

According to Webber's statements in documents filed with Ramsey County District Court, the incident in the conference room marked the onset of more than two years of constant mental torture. Shakir, she claims, made untoward sexual advances on an almost daily basis--making lewd comments about her body, shoving his hand down her blouse, and rubbing his crotch suggestively when they spoke. "It made me realize why my father warned me never to become an administrative assistant," she says now. "That women were taken as sex objects by men in power."

In a deposition taken on February 23, 2000, Webber recounts a particularly degrading incident that took place one afternoon in the winter of 1996. Shakir called her into the Alliance's conference room. When she entered, she testified, he was leaning back in a recliner with his fly unzipped. He was holding his penis. As she retreated, she alleges, Shakir made comments like, "Look at this, it's big," and, "Come sit on it." She says she responded by telling Shakir he was sick.

Webber says that despite the abuse, she felt she couldn't quit her job; she needed the money. Her husband, whom she is now in the process of divorcing, had not been working and she was the sole breadwinner for the family.

Webber was laid off in March of 1997. According to depositions given by Shakir and one former member of the Alliance's board of directors, Stella Whitney-West, the organization simply didn't have enough money to keep an office manager on the payroll. But Webber alleges that her employment was terminated because she'd attempted to bring Shakir's behavior to the attention of Whitney-West and other board members.

After she lost her job, Webber says, her life went into a tailspin. She had recently become pregnant and was now without health insurance. Foreclosure proceedings were begun on her house, she says, and her car was nearly repossessed.

In November of 1997 Webber filed a complaint with the Minnesota Department of Human Rights, alleging sexual harassment. An investigation by the department concluded that "probable cause exists" that Webber had been discriminated against. She then filed her lawsuit against Shakir and Frogtown Action Alliance in Ramsey County District Court, seeking more than $50,000 in damages.

In a deposition taken this past January and filed in Ramsey County District Court, Shakir denied all of the charges. He specifically stated that Webber never confided in him about her marital problems, that he never exposed himself in the office, and that he never made any sexual advances. He said Webber was an unreliable employee who was frequently late to work and spent too much time making personal phone calls. The issue of whether she should be fired, he noted, had come up on several occasions. In her deposition, board member Whitney-West confirmed that the board was aware of concerns about Webber's work.

But Webber's allegations are supported by a host of witnesses. Six people who worked in the Dale Street building provided sworn affidavits that they had witnessed Shakir behaving inappropriately toward Webber and others. Perhaps most damaging was an affidavit by Dawn Goldschmitz, executive director of the Greater Frogtown Community Development Corporation, which rents space in the building from Frogtown Action Alliance. Goldschmitz stated under oath that on one occasion Shakir came up behind her and began nibbling on her neck while she spoke on the phone. When she confronted him about the incident, Goldschmitz said that Shakir's response was that the only reason she was complaining was because he was a black man. "Because of Mr. Shakir's conduct toward women that he comes in contact with at the workplace," Goldschmitz stated in her affidavit, "I am now warning all of my new employees that they should use caution with Mr. Shakir and they should be careful not to establish a personal relationship with him because he tends to overstep professional boundaries."

Webber's lawsuit was slated for trial July 10, but in June it was settled out of court. The agreement is confidential, so only the parties involved know how much money was involved, if any. But those who work with the Frogtown Action Alliance say the suit only served to further cripple the group and its ability to serve as an agent of change in the neighborhood. Money spent on attorneys' fees or monetary settlements is money that isn't going to the corner bar that needs a new façade or the Hmong translation business that's looking for a low-interest loan.

"Wherever this money is coming from, it's not good," says Jerry Blakey, the St. Paul City Council member. "What it does is, it puts the organization at a standstill--and that means the community isn't being served."

Webber's sexual harassment lawsuit and the failed puzzle company aren't the only problems plaguing Frogtown Action Alliance. In recent years, the nonprofit group has left lawsuits, liens, and disgruntled business partners in its wake.

The government has filed tax liens against Frogtown Action Alliance five times since 1995 for failure to pay payroll taxes. The nonprofit group claimed in its August 7 press release that all of these liens had been satisfied, but according to Ramsey County records, up until August 30, the organization still owed $26,944.27 to the Internal Revenue Service. The debt has now been cleared.

In July the Alliance settled a lawsuit brought by HIRED, a nonprofit group that specializes in job training and placement. HIRED was contracted by the Alliance in 1998 to provide employment-placement services to Frogtown residents. By June of last year, the organization had enrolled 201 Frogtown residents and placed almost half of them in unsubsidized jobs. But according to the lawsuit, the Alliance failed to pay the final three months of HIRED's contract. The two parties settled the dispute in July, with the Frogtown Action Alliance agreeing to pay $9,863.84. The job-placement service moved its operation downtown, severing its relationship with the Alliance and the Frogtown neighborhood.

Other Frogtown Action Alliance programs appear to be in peril as well. The Frogtown Large Loan Fund has been mostly dormant since early this year, according to Terri Banaszewski, vice president for small-business banking at Wells Fargo Bank Minnesota and a member of the committee that approves loans from the fund. Banaszewski says the Alliance has not submitted any client loan applications to the committee in months. "We're kind of just in a holding mode until we see a loan request presented, and we haven't seen that of late," she says. "The program is there, but we aren't putting out any dollars at the current moment."

University National Bank has begun eviction proceedings against the Alliance for failure to pay rent on offices it leases at 200 University Ave. The building is home to the Frogtown-University Business Resource Center, where local entrepreneurs can go to work on their business plans or get access to a computer.

The Frogtown Times, too, says it is owed money. Tony Schmitz, the neighborhood newspaper's editor and publisher, who has written several articles about the nonprofit's troubles, claims the organization owes $825 in unpaid advertising bills.

One person who is unlikely to feel the fiscal pinch is Shakir. According to the group's 1998 tax return, the most recent available for public perusal, he made $99,032 as head of Frogtown Action Alliance--a salary increase of 37 percent over the previous year. In addition, Shakir took home $15,121 in benefits. (By way of comparison, the executive director of the Greater Frogtown Community Development Corporation, a nonprofit group with a comparable budget, received salary and benefits totaling less than $50,000 in 1998.)

Shakir ultimately answers to the Alliance's board of directors, but determining who makes up that board is a daunting task. Lists of the group's board members that have been provided to potential benefactors or attached to the group's most recent tax returns include a dozen names, but several of those named are no longer active in the organization.

In fact, there appear to be only three active board members at present: Lucy Johnson, Mike Tierney, and Andy Williams. Johnson did not return two phone calls from City Pages seeking comment for this story. Tierney, who works for Independent Delivery Service, a Frogtown business, says some of his fellow board members have stopped showing up for meetings. "I didn't figure when there were problems that you should run," he says. "You try to deal with whatever the problems are." But Tierney declines to comment about the organization.

Although he refuses to discuss the specifics of the Alliance's financial and legal difficulties, Williams, who has worked with the group since its founding in 1992, offers unqualified support for Shakir. "I think he's doing a hell of a job," he says. "I don't think anybody could do a better job than Shem Shakir. That's why we hired him."

All of the carping about Shakir amounts to nothing more than resentment, Williams argues. "People have been looking at the salary that Mr. Shakir's been getting, but if you would look at any other CEO or executive director you would find that people get paid according to their production," he says. "People don't look at Mr. Shakir's paycheck in terms of what he's done. They look at it as a black man making a lot of money. The man dresses well, he drives nice cars, and people are jealous."

Michael Samuelson, who until May was executive director of the District Seven Planning Council, also feels that race is a factor--insofar as it is employed to defend Shakir. "Who wants to take on one of the few strong African-American leaders in St. Paul?" Samuelson asks rhetorically. "That's one of the reasons why this has been allowed to fester over the years."

If the Frogtown Action Alliance is to emerge from the current turmoil, the group will have to do so while facing a second sexual harassment lawsuit. On July 21 Marion Whitlock, who worked as Shakir's administrative assistant for almost two years beginning in early 1998, filed a suit against Shakir and the organization in Ramsey County District Court. Whitlock hired Webber's attorney, Alf Sivertson, and her complaint reads a lot like her predecessor's. Whitlock alleges that her boss constantly touched and caressed her calves, breasts, and other body parts, and that he made demeaning statements such as, "Come here with those big titties." When she rebuffed Shakir's advances, he retaliated by screaming at her and belittling her.

"During that time I would come home from work and I would be very irritable and I would holler and scream at [my son] for no reason," Whitlock recalls by phone from Philadelphia, where she has since moved; she now works as a research recruiter at the University of Pennsylvania. "I didn't have a social life. I would go in my room and shut the door and go to bed. I stopped taking care of myself."

Whitlock quit her job at the Alliance on December 21, 1999. She says the only reason she stayed in the job for so long is that Shakir had convinced her that she was so incompetent that nobody else would hire her. "I was losing my mind, basically, is what it was," she says today. "When you do the best that you can do, and when you know that you've done the best you can do, for someone to come back and holler at you and make you feel stupid, that's enough to make you question who you are."

In their written responses to Whitlock's complaint, Shakir and the Frogtown Action Alliance deny all the allegations. Further, the nonprofit group has filed a counterclaim alleging that Whitlock embezzled more than $3,500 from the organization; they seek in excess of $50,000 as compensation. Attorney Alan Weinblatt, who is representing Shakir and the Alliance in the matter, says that it is too early for him to comment on the case, beyond what is available in the court filings. Whitlock refutes the embezzlement charges, and claims that she didn't even have access to the organization's accounts. "I had control of nothing," she says. "[Shakir]'s a control freak. You can't do anything without his permission."

As the Alliance confronts this most recent allegation, officials at some other Frogtown nonprofits fear the cloud that has descended over the economic-development group will hamper their own ability to raise funds and fulfill their missions. "There has always been this sort of sense that in Frogtown they don't have their act together," says Mike Samuelson. "And when an organization like this screws up, then the broad brush can be painted with all the other organizations. If there is this constant mismanagement of funds, who is going to give any organization any money to do other work that might be needed in the neighborhood?"

Perhaps the most important unanswered question is whether Shakir can continue to run his organization. With only three ostensibly active members, the group's board is unlikely to move to replace him. "I can't tell him to go or leave," exclaims Ramsey County Commissioner Janice Rettman, who notes that the Alliance receives no county funds. "But I think that's one of those questions that the board better wrestle with."

Liz Stevens, who chairs the board of directors of the Greater Frogtown Community Development Corporation, puts it more bluntly: "If I was the chair of the Frogtown Action Alliance, Shem would have been terminated, or I would have resigned."